Massachusetts: Westfield City Council developing cold feet over 40-year tax deal for proposed $2.7 billion data center

Oct 06, 2021 | Posted by Abdul-Rahman Oladimeji

Westfield’s City Council has become skeptical about the 40-year tax break deal it wants to grant the developers of the $2.7 billion data center in the city. The council sat on the matter on Monday, October 4, 2021, but they were not expected to make a final decision then. The project will get another public hearing today, October 5, 2021, before the planning board.

Councilor at Large, David Flaherty said the developers proposed to pay taxes at a low rate of $60 per square foot. Another Councilor at Large, Dan Allie said the city has financial commitments which include its road network that is making the councilors approve long-term tax deals. The developers of the data center Servistar Realties LLC previously applied for a tax deal called a 121A. This is a 40-year deal that will exempt it from personal property tax on computer equipment. Yet, the company will still pay taxes up to $1.3 million in the first few years. Officials also said this would make it the largest taxpayer in Westfield.

Director of Servicestar Realties and DBS Energy, Erik Bartone, said taxes only constitute about 8% to 10% of the project’s operating expenses. He noted that energy cost is the biggest part of its expenses. Erik further added that the long-term tax deal is important because the company doesn’t want a situation where the future government of the city will change the tax arrangement. The matter has been passed to the finance committee before the final hearing.